Green Building Barometer shows substantial increase in green certified buildings

With the new year well underway, now is a great time to review the state of green building in California. The good news is that California is closing in on the important “50% of Class A office space being green” mark. The not-so-good news is that there is still a long way to go in order to improve the sustainability of Class B and C office buildings.

As of November 2010, 48% of Class A office space in California was certified green (i.e., EnergySTAR® and/or LEED certified—equating to approximately 100 million square feet of office space, and a nearly 100% increase from the 26% of Class A office space that was certified green when we introduced our barometers in October 2008.

Unfortunately, the adoption of green building practices for Class B and C office buildings is markedly lower, at least in terms of such practices being recognized through certification. As of November 2010, 7.4% of Class B office space was certified green as compared to just 2.7% in 2008. Similarly, green Class C space has more than tripled from 0.2% in 2008 to its current level of 0.8% . However, despite this growth, the green base still remains small, and more needs to be done to promote the type of initiatives that allow lower-class buildings to earn green certification.

Differences between Class A, B & C office buildings are due to multiple factors including:

• Many Class A buildings are built to higher specifications, with advanced levels of design and systems that are inherently more energy efficient
• Potential lessees of Class A space are more frequently looking for green space
• Class A space owners and property managers have better access to capital for investments
• Ownership of many Class B and C buildings is generally split among many investors
• Investors in Class B and C buildings typically have shorter investment time horizons
• Finally, for higher-end buildings, the reductions in utility costs resulting from green improvements are more likely to make a significant impact on building operating expenses.

Looking back, it is rewarding to see significant increases in the proportion of certified green space occurring during a time period with historically high vacancy rates and a severe economic recession. With the economic situation improving, we can now look forward to many further advances in the greening of commercial buildings.